Rhodes Center Events

Jazmin Sierra, Assistant Professor in the Department of Political Science and a Faculty Fellow at the Kellogg Institute for International Studies at the University of Notre Dame will join us to discuss her upcomming book "Partners at home and abroad: How Brazil Globalized State Capitalism"

This book  project explores the emergence of ‘globalized state capitalism,’ a new mode of state intervention whereby governments provide incentives for domestic firms to expand their economic activities beyond the boundaries of the nation-state. 

A development strategy that includes promoting the outward foreign direct investments of domestic firms is puzzling because it produces strong political and distributional challenges. When governments in developing countries sponsor multinational corporations they are signing on to a policy that sends large amounts of capital abroad instead of investing it in the domestic economy, is perceived by workers as threatening to local employment, and can empower business to a point where a firm can vote with its feet when faced with unfavorable policies at home. Under what conditions will policy-makers decide to promote domestic multinational corporations? What policy tools will they use? What impact does government support have in creating globally competitive firms? And how do governments address the political backlash to this policy?

I argue that governments will provide support for the foreign investments of domestic firms when key policy-makers hold causal beliefs regarding the developmental benefits of firm internationalization for the home economy and enjoy the institutional capacity to address the political backlash this policy may face. Both conditions, in turn, are more likely to be present under a legacy of state-led development.

I build my theory of globalized state capitalism in the context of Brazil and examine its wider applicability for understanding development strategies in China and India. Since 2005, the Brazilian government has used the Brazilian National Development Bank (BNDES), which has a lending portfolio twice the size of the World Bank, to provide financial support for nationally controlled firms to produce or innovate in foreign countries. While China has also supported the foreign investments of domestic firms, in Brazil this policy was implemented under a vibrant democracy governed by the PT, a programmatic labor-based party with strong ties to social movements. This makes it an excellent setting to study the political conditions under which this policy can be pursued. Evidence was gathered during fifteen months of fieldwork and comes from an original firm-level dataset of Brazilian multinational corporations, archival research of firm-level documents, and over 150 interviews with BNDES bureaucrats, firm managers, and union and social movement leaders.